The revelation in HSJ this week of significant overspends in 33 primary care trusts is a worrying indicator of problems ahead.
The total overspend from those 33 of around £100m in-year is hardly catastrophic, not least because some of their PCT neighbours are underspent.
Nearly all the PCTs cite growing activity in acute trusts soaking up their cash as one of the central causes
But it suggests an underlying weakness in the ability of more than one in five PCTs to control their budgets.
NHS Hounslow, for example, has formally suspended its standing financial instructions. That is a very unhappy place to be.
Nearly all the PCTs cite growing activity in acute trusts soaking up their cash as one of the central causes.
But this problem is not confined to those in deficit. As Andy McKeon, managing director of health at the Audit Commission, revealed last week, the entire 6.5 per cent PCT funding increase last year was swallowed by acute trusts, even though the tariff only increased by 2.3 per cent.
Although we will have to wait until the pre-Budget report on 9 December for the Treasury’s official spending projections, the strategic health authorities have already done their sums for 2011-12 onwards.
Despite health secretary Andy Burnham’s plea to managers not to conduct their own mini spending reviews, papers from NHS North East let slip that the SHAs have rightly done just that, and are assuming there will be a cash freeze in PCT allocations from 2011-12 to 2013-14. They say this implies an efficiency assumption of 4.5 per cent a year and a cash cut in the tariff.
Against this backdrop the Department of Health must have concerns about how some PCTs are going to cope over the next four years. The answer has to be to move significant volumes of care out of hospitals.
There are a growing number of PCTs leading the way in integrating services with local government and making progress on managing demand for acute services - Torbay, Liverpool and Birmingham East and North among others. They prove it can be done.